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Trump tax reform! Latest CBO update shows increase in deficit projections of 1T (1 Viewer)

Oh man tomorrow is going to hurt. 

Wht about us small guys with pass through companies, essentially they take 20% off the top then tax you at normal rate?
I think.... I went in focusing on that and got invested in everything else. But that doesn't tell the whole story.  What can be expensed is changing and the very real hell on health care this is is going to be a cost nightmare for small business.

 
I'm less informed on pass-throughs than others here, so I welcome corrections or further explanation. But, as I understand it, companies would determine their income(based on owner's individual rate)  and then subtract 20% of it.

Now that they have voted to advance the bill, we could see other changes/compromises as amendments are offered in debate leading up to the vote. And then another round when the two chambers go to conference committee
This is roughly correct, yes.  The House bill allows for 30% of qualified pass-through income to be taxed at preferential rates with the remaining 70% subject to ordinary income rates.  Conversely, the Senate will continue to tax pass-through income at ordinary rates, but will allow a deduction of 20%.  The way I'm reading it, example:  taxpayer has $100,000 qualified pass-through income.

House:  $30,000 taxed at lower preferential rates + $70,000 taxed at ordinary rates

Senate:  $80,000 taxed at ordinary rates [$100,000 - $20,000 deduction]
@GoBirds, Here's previous pass through discussion ^^

 
Anybody seen anything regarding the Dependent Care FSAs? If this bill is going to pass, I hope they keep that. 

 
Here's the part on SALT. The bolded makes me question of the suggestion to pre-pay taxes. I think paying your Q4 estimate in December vs Jan should be okay since it is for Tax Year 2017, so not really pre-paying.If your property taxes are considered 2018, seems you couldn't do it,

"Under the provision a taxpayer may claim an itemized deduction of up to $10,000 ($5,000 for married taxpayer filing a separate return) for the aggregate of (i) State and local property taxes not paid or accrued in carrying on a trade or business, or an activity described in section 212, and (ii) State and local income, war profits, and excess profits taxes (or sales taxes in lieu of income, etc. taxes) paid or accrued in the taxable year. Foreign real property taxes may not be deducted under this exception. The above rules apply to taxable years beginning after December 31, 2017, and beginning before January 1, 2026. The conference agreement also provides that, in the case of an amount paid in a taxable year beginning before January 1, 2018, with respect to a State or local income tax imposed for a taxable year beginning after December 31, 2017, the payment shall be treated as paid on the last day of the taxable year for which such tax is so imposed for purposes of applying the provision limiting the dollar amount of the deduction. Thus, under the provision, an individual may not claim an itemized deduction in 2017 on a pre-payment of income tax for a future taxable year in order to avoid the dollar limitation applicable for taxable years beginning after 2017. 

 
For those of you who can't read an actual bill to make sense of the legal mumbo jumbo,  I condensed the statutory language below. 

... Following release from prison, Danny Ocean violates his parole by traveling to California to meet his partner-in-crime and friend Rusty Ryan to propose a caper. The two go to Las Vegas to pitch the plan to wealthy friend and former casino owner Reuben Tishkoff. The plan consists of simultaneously robbing the Bellagio, The Mirage, and the MGM Grand casinos. Reuben's familiarity with casino security makes him very reluctant to get involved, but when he starts to think of it as a good way to get back at his rival, Terry Benedict, who owns all three casinos, Reuben agrees to finance the operation. Because the casinos are required by the Nevada Gaming Commission to have enough cash on hand to cover all their patrons' bets, the three predict that, on the upcoming night of a highly anticipated boxing match, the Bellagio vault will contain more than $160,000,000.  Danny and Rusty recruit eight former colleagues and criminal specialists: Linus Caldwell, a young and talented pickpocket; Frank Catton, a casino worker and con man; Virgil and Turk Malloy, a pair of gifted mechanics; Livingston Dell, an electronics and surveillance expert; Basher Tarr, an explosives expert; Saul Bloom, an elderly con man; and "The Amazing" Yen, an accomplished acrobat. Together they will pull off the heist of the century. 

And if that is too confusing for you...

Following reality television, Donald Trump  violates common decency by traveling to New Hampshire to meet his partner-in-crime and friend Steve Bannon to propose a caper. The two go to Moscow to pitch the plan to wealthy friend and former KGB agent Vladimir Putin. The plan consists of simultaneously robbing the US Treasury, The Social Security Trust Fund, and the Federal Reserve Banks. Putin's familiarity with government security makes him very reluctant to get involved, but when he starts to think of it as a good way to get back at his rival, The United States, who owns all three agencies, Putin agrees to finance the operation. Because the agencies  are required by the Congress of the United States to have enough cash on hand to cover all their patrons' needs the three predict that, on the upcoming night of a highly anticipated presidential election, the Treasury vault will contain more than $160,000,000, 000,000. Donald and Steve recruit eight former colleagues and political specialists: Jared Kushner, a young and talented pickpocket; Paul Ryan, a Congressman; David and Charles Koch, a pair of gifted mechanics; ,Paul Manafort, an international spy and surveillance expert; Ajit Pai, an explosives expert; Jefferson Sessions, an elderly con man; and "The Amazing" Sarah Sanders, an accomplished acrobat. Together they will pull off the heist of the century. 

Hope that helps. 

 
Wow, when you combine the rate cuts and the bracket adjustments, that’s a pretty hefty tax cut (not taking into account the deduction limitations/eliminations).

 
Wow, when you combine the rate cuts and the bracket adjustments, that’s a pretty hefty tax cut (not taking into account the deduction limitations/eliminations).
It was pretty much a wash for me by losing $10,000 in deductions. $18k itemized +$16k exemptions moves to $24k standard deduction. Where I benefit is the $2000 * 2 child tax credit. That isn't phased out until $400k AGI. Currently I lose most of the $1k per credit because of income phaseouts. I'm assuming the rates and cutoffs stayed the same as the Senate version in the analysis above. Anyone know if they changed except for the giveaway at the top?

 
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Whether you benefit or not really boils down to which state you live in.  If you don’t live in CA, NY, or NJ I don’t see a lot of ways you can come up a loser in this.
Maryland will be hard hit as well.  I'm sure there are other states / localities in that bucket.

 
I totally get your reasoning for opposing it if you believe it will add that much to the debt.  I don't believe those numbers and feel the GDP growth will help bring in additional tax dollars.  As I stated above, if it doesn't work then we will have to aggressively attack the debt and the same people who benefit the most from the tax cuts will need to pay the most in the future.  Let this play out and see what happens.
Please predict GDP growth for the next 5 years and we'll see where we end up.

 
Can someone explain the legal side of this to me? How long until this can be rewritten? If the Dems take majority in house & senate can they get to this right away?

my fear is the Trump voters won’t realize what this is for a few years (and somehow still love it anyways), but my hope is there are a bunch of Independents who will put it together much quicker.

 
Please predict GDP growth for the next 5 years and we'll see where we end up.
This is late cycle, most economists agree on that. Maybe we get one or two banner years in 2018 & 2019, but this cycle doesn’t have another 5 years to it. 

Prediction for the next 5:

3.3, 3.1, .05, 1.3, 1.7 throwing darts.

 
FWIW, I think you wanna play this for a rally into 1H18 - maybe we get some selling the news, but they’ll all be buying soon enough.

My top 3:

You want in on commodities anyways heading into 2018, and COP benefits from this bill nicely, buy them.

AAPL, got a lot of money coming home, they’ll be using it to buy back shares (oh, and also to hire a lot more and pay employees A LOT more :lmao:  good one, GOP).

JPM, gotta play a bank, I think they’re interchangeable with BAC here, but I’m rolling with them. Banks are gonna lead the rally.

Even if we hit some speed bumps, I think these 3 will all by at least 8-10% higher 6 months into the future. I’m uncomfortably overweight the aforementioned.

So for those that want to say I’m not a capitalist or whatever, you’re dead wrong - THIS TAX BILL IS JUST SH IT... But I’ll try to make money anyways.

 
Can I see some data on this? I cant find anything backing this up. 
Data? Obviously not. Opinion? There’s a lot of it. Here’s Ben Stein from Fox Business: 

https://www.google.com/amp/www.foxbusiness.com/politics/2017/12/04/tax-reform-will-push-u-s-economy-toward-inflation-ben-stein.amp.html

Stein has never recovered his overall credibility after being paid to narrate that embarrassing Intelligent Design movie, but nobody can argue with his economic chops from a conservative perspective. I’ve also heard a Forbes guy on TV repeat these arguments, and there was also the piece I posted earlier, also from a conservative. 

 
I was very much opposed to Obamacare, but after it passed I wanted it to work because (1) there was no way to undo it and (2) if it didn’t work, people would suffer. It angered me greatly that there were folks here and elsewhere who seemed to like it when some people suffered from ACA because it proved them right. 

I feel pretty much the same way here. I think this bill will be awful for America, but it will also be very difficult to undo. So when it does pass, I will hope that I am wrong about it, and that it really does bring about the economic growth that Republicans are predicting. But if it doesn’t, and if a lot of people suffer as a result, I hope that nobody who was opposed to this starts to celebrate. Because I won’t. 

 
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I was very much opposed to Obamacare, but after it passed I wanted it to work because (1) there was no way to undo it and (2) if it didn’t work, people would suffer. It angered me greatly that there were folks here and elsewhere who seemed to like it when some people suffered from ACA because it proved them right. 

I feel pretty much the same way here. I think this bill will be awful for America, but it will also be very difficult to undo. So when it does pass, I will hope that I am wrong about it, and that it really does bring about the economic growth that Republicans are predicting. But if it doesn’t, and if a lot of people suffer as a result, I hope that nobody who was opposed to this starts to celebrate. Because I won’t. 
Wait, I thought you said this tax bill passing was great for Democrats.  If Democrats take control of the House next year you won't be celebrating? 

 
Wait, I thought you said this tax bill passing was great for Democrats.  If Democrats take control of the House next year you won't be celebrating? 
I won’t be displeased by that outcome, for several reasons. But if it’s a result of a lot of people suffering it won’t be worth it (though in truth most of the suffering will be long term and we won’t see much of it in 2018.) 

I think it will be great for Democrats because, much like Obamacare, one Party is passing a law that the public really doesn’t like. So just as in 2010, we can expect the voters to retaliate against the party that passed it in the next election. Except that it will probably be worse than 2010 for two reasons: first because the public hates this bill even more than they hated Obamacare, and second, because Trump is an embarrassing fool that less than 32% of the public approves of, and voting for Dems next year will be viewed as a way to repudiate him, just as it was in Virginia and Alabama. 

 
My opinions on the election this year were pretty strong, I wanted one man to run and he didn’t... I kinda blame him a little bc we might have a much different/smarter government had he run. While I blame him for not running, you can’t argue that from a business/economics standpoint Bloomberg isn’t one of the sharpest in the world - here is a quick take of his opinion on this tax bill, well worth the read:

https://www.bloomberg.com/view/articles/2017-12-15/this-tax-bill-is-a-trillion-dollar-blunder

 
My opinions on the election this year were pretty strong, I wanted one man to run and he didn’t... I kinda blame him a little bc we might have a much different/smarter government had he run. While I blame him for not running, you can’t argue that from a business/economics standpoint Bloomberg isn’t one of the sharpest in the world - here is a quick take of his opinion on this tax bill, well worth the read:

https://www.bloomberg.com/view/articles/2017-12-15/this-tax-bill-is-a-trillion-dollar-blunder

 
I won’t be displeased by that outcome, for several reasons. But if it’s a result of a lot of people suffering it won’t be worth it (though in truth most of the suffering will be long term and we won’t see much of it in 2018.) 

I think it will be great for Democrats because, much like Obamacare, one Party is passing a law that the public really doesn’t like. So just as in 2010, we can expect the voters to retaliate against the party that passed it in the next election. Except that it will probably be worse than 2010 for two reasons: first because the public hates this bill even more than they hated Obamacare, and second, because Trump is an embarrassing fool that less than 32% of the public approves of, and voting for Dems next year will be viewed as a way to repudiate him, just as it was in Virginia and Alabama. 
No chance the public hates this bill more than Obamacare.  That was a turd and it is dying a slow death.

Edit to add that the Alabama result was 100% due to a flawed candidate, not a vote against Trump.

 
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No chance the public hates this bill more than Obamacare.  That was a turd and it is dying a slow death.

Edit to add that the Alabama result was 100% due to a flawed candidate, not a vote against Trump.
Both of your assertions are factually wrong: 

1. When Obamacare passed, 62% of the public disapproved. Over 75% of the public disapproves of this law. 

2. Moore lost in large part due to blacks voting at a higher rate than even in 2008, which was the previous high rate for them in Alabama. Exit polling reports that a strong majority of black voters saw voting against Moore as a repudiation of Trump. 

 
My opinions on the election this year were pretty strong, I wanted one man to run and he didn’t... I kinda blame him a little bc we might have a much different/smarter government had he run. While I blame him for not running, you can’t argue that from a business/economics standpoint Bloomberg isn’t one of the sharpest in the world - here is a quick take of his opinion on this tax bill, well worth the read:

https://www.bloomberg.com/view/articles/2017-12-15/this-tax-bill-is-a-trillion-dollar-blunder
Great article. We really do have a bunch of morons at the reins of our economy.

 
No chance the public hates this bill more than Obamacare.  That was a turd and it is dying a slow death.
I believe the support for the tax bill is around 25-26%. Support for Obamacare is about twice that. 

RCP polling average

Edit to add that the Alabama result was 100% due to a flawed candidate, not a vote against Trump.
The exit polling for the Alabama election shows that 1 in 5 voters were there to vote against Trump.

Exit polling

 

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